Reserve Bank board dissenters unlikely to be revealed, deputy governor says

Board members of the Reserve Bank’s new rate-setting committee are unlikely to have their names published if they dissent, as the central bank attempts to reduce ‘noise’ around its interest rate decisions.

RBA deputy governor Andrew Hauser at Senate estimates on Thursday. Picture: NewsWire / Martin Ollman

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Board members of the Reserve Bank’s new rate-setting committee are unlikely to have their names published if they dissent, as the central bank attempts to reduce “noise” around its interest rate decisions, its deputy governor Andrew Hauser has said.

The RBA’s second-in-command also revealed in an appearance before federal parliament on Thursday that board members would likely be required to explain the central bank’s reasoning behind its cash rate calls, rather than their own personal views, when giving speeches.

The comments come as the central bank presses ahead with its largest structural overhaul since it was formed in 1967, which next month will move to establish separate monetary policy and governance committees, delivering on the recommendations of a sweeping review.

The RBA has already set in place many of the review’s recommendations – including fewer meetings, which are now followed by a press conference – but will soon turn to how it will publicly disclose board members’ voting and the requirements it will impose on them when speaking publicly.

Both changes will be formally discussed by the new rate-setting board at its first two-day meeting, scheduled for March 31 and April 1, with any changes to be codified in the RBA’s statement on the conduct of monetary policy.

Speaking at Senate estimates, Mr Hauser, who was previously a senior official at the Bank of England, said it was unlikely individual votes of board members would be publicly disclosed as they are by his former employer.

“I think personally it’s very unlikely that we would get to a position like the Bank of England,” Mr Hauser said, claiming that its arrangements resulted in board members feeling as if they “had to explain why they took the views that they did”.

He also cited the arrangements of the US Federal Reserve where the unidentified votes of board members are published.

Regarding public appearances, Mr Hauser said there was a desire within the RBA for the “rival economic arguments” behind interest rate decisions to be openly aired, but it was important members’ personal views did not muddy the central bank’s messaging.

“There is … a desire to increase transparency and accountability, which is obviously the goal,” Mr Hauser told senators. “But also a desire not to increase the noise over the signal, and a desire not to personalise what is ultimately a public policy debate.

“It will actually be very much on the minds of board members that they wish to maintain and enhance the clarity of the policy decisions the board has made.”

Mr Hauser was also questioned about the RBA’s decision to deliver a quarter-percentage-point cash rate cut last week, lowering the official cash rate for the first time since 2020.

Had it held the cash rate at 4.35 per cent, Mr Hauser said, the RBA risked causing underlying inflation to undershoot its 2 to 3 per cent target band, which it instead expects will ease to 2.7 per cent by mid-year and remain at that level for a further two years.

That forecast was predicated on market assumptions for three rate cuts in 2025. But Mr Hauser said the RBA did not expect it would deliver that many reductions, thus assisting it in hitting its target of 2.5 per cent.